Informes > PRENSA > Luxury apartments lead building boom in Argentina REUTERS

Luxury apartments lead building boom in Argentina

Luxury apartment towers are sprouting up across the Buenos Aires skyline, leading what developers hope will be a wider building boom four years after Argentina's economic collapse.

Fuente: Damian Wroclavsky. Transcripción de cable de agencia Reuters del 7 de Octubre de 2005.

The market for high-end properties is attracting both wealthy Argentines and foreign investors, helping to spur more than $850 million in new projects concentrated in Buenos Aires' wealthiest corridors.
Brokers say this property market has attracted Argentines in search of a financial safe haven. Most buyers, they say, have few intentions of actually living in their newly purchased apartments.
Argentina's economy is rebounding from its 2001-2002 financial crisis with the third straight year of growth of about 9 percent a year -- one of the highest in the world.
But many Argentines remain leery of keeping money in banks after their savings were frozen for months and dollars were forcibly converted to devalued pesos with a 70 percent loss.
As a result, many have turned to real estate where property values are priced in dollars and prices have rebounded to pre-crisis levels.
Construction activity soared 18 percent in the second quarter of this year, compared with the same period a year earlier, the government statistics agency reported last month, adding the sector accounted for 60 percent of all investment.
But a look at where the construction is concentrated has raised questions about the benefit of the pell-mell growth. "The real estate sector is a reflection of the polarization of Argentine society," said German Gomez Picasso, director of the Web site, which tracks the real estate market.
For a majority of Argentines, these properties remain far out of reach -- apartment and home prices often start at around $175,000 in a country where the per capita income averages around $230 a month.
"We build for the wealthy because it's the only demand that's out there," said Eduardo Gutierrez, president of Vizora, an alliance of the Argentine housing developer Farallon and banking group Macro-Bansud.
Raul Saenz Valiente, general manager of Ceaurban, which has invested $50 million in developing luxury properties, said these buyers don't mess with mortgages and rather pay in cash.
According to private estimates, foreign investors accounted for some 15 to 50 percent of property sales.


The epicenter of Argentina's high-end property boom is the neighborhood of Puerto Madero, where a stretch of red-brick docklands and grain silos built in the late 1800s now house gleaming apartments, restaurants and offices.
Construction cranes have filled the area in recent months as new apartment towers have sprung up.
Prices per square meter in Puerto Madero average $2600; brokers say apartments are being sold even before they are built.
Recently announced housing complexes include a $220 million project by real estate developer Vizora. Another group, Faena Properties, plans to build a $170 million high-end apartment complex, a year after opening a $120 million five-star hotel.


The construction boom has in part helped fuel Argentina's economic recovery. The government says the sector accounts for about about one-ninth of the gross domestic product.
President Nestor Kirchner has also launched a public works program, hoping to lower the country's 12.1 percent jobless rate. Vizora's Gutierrez said he hopes the growth in luxury properties proves a starting point for more real estate projects aimed at ordinary Argentines.
Credit remains limited for a majority of Argentines, who saw their purchasing power shrink dramatically after the country's bruising 2002 devaluation.
Even with what many in the industry are calling a "mini-boom," statistics show the sector remains far off its heady days during the 1980s when mass projects went up aimed at middle-class Argentines.
"The concentration of sales in exclusive areas and the fact that most are cash transactions show that today's market remains reduced," said Construya, an association of construction firms, in a report released last month.
Only 6 percent of recent sales were done using bank financing, according to private estimates.
Government projects seek to build 120,000 homes in 2005 and and 300,000 in 2006 targeting lower and middle-income families. But analysts say more projects are needed.
"There are only a few, but nothing on a grand scale," said Jose Rozados, also the Reporte Inmobiliario site.
The government recently announced it is studying plans to offer a subsidy for mortgage seekers that could bring rates down from 11 percent to between 5 and 6 percent.
Saenz Valiente said he welcomed the initiative but wondered what properties people might buy."There is nothing to sell to them," he said. "We'd have to start laying concrete right now because there isn't anything new built. Now that would be a construction boom."

©, Octubre 2005.

Puntuación Promedio: 4 - votos: 5
Por favor tómate un segundo y vota por este artículo:

Muy Bueno


Informate al instante

Reporte Inmobiliario

Valor metro cuadrado por manzana

Suscribete a nuestro newsletter semanal